Quiet, smouldering fury of RBS victims

'IT USED to be a great annual event," the taxi driver reminded me as he drew up behind a fleet of police vans outside the Royal Bank of Scotland's annual meeting. "They all used to come out smiling."

Not now they don't. This affair was more a wake than an AGM – and one where the mourners were minded to drag out the corpses and machinegun them back into the coffins. What was not already dead from the previous boardroom regime, they would happily have dug graves for, too.

RBS was taking no chances over an armed uprising. The security checks – including an aircraft-boarding-style handbag and jacket search – were lavish, which was more than could be said for the customary tea and sandwiches. All gone, now the taxpayer is in charge.

This was a meeting of quiet, smouldering anger, with every likelihood of erupting into a blazing fury if new chairman Sir Philip Hampton got a word or phrase wrong.

What marked the shareholders' questions yesterday was their restraint, their dignified bitterness at a once great bank that had almost totally wiped out the value of investments they had held for years.

Especially poignant were the questions from former staff still trying to comprehend how their bank could have lost so much, and so quickly.

And all so magnified by an all-conquering acquisition of a chunk of the Dutch bank ABN Amro that they had only ratified, following a fulsome boardroom recommendation, less than 18 months ago.

John Waterson, a private shareholder, agreed with Sir Philip that the "public flogging" had to stop but queried why the board still contained three directors from Sir Fred Goodwin's days. "They have brought the share price down to the level of a penny share. All of these board members," he added to applause, "should be in jail."

Another demanded that Gordon Pell, deputy chief executive and one of the survivors from the ancien rgime, account for himself.

Another private shareholder, Mrs Evans, recalled a meeting at Gogarburn last year at which Sir Fred had assured her that ABN Amro was a good buy. "Did I imagine I was told that, or not?" she asked.

Many seemed doubtful as to whether change at RBS had gone nearly as far or as fast as they wished. Perhaps it was the familiar Soviet politburo-style set-up on the stage of the Edinburgh International Conference Centre, with its Gaumont cinema-like screen behind the directors, that gave the unfortunate impression of plus a change, plus c'est la mme chose.

And the suited directors did look ominously similar to the ones who had just driven the bank off a cliff.

Might this have been a Romanian-style revolution, where the red suits were simply replaced by blue suits but the people wearing them were really the same? Was this a new board, or a sort of Continuity RBS that would relapse back into the old ways once the heat was off?

It didn't help that Hampton's presentation – eloquent and well crafted, to be sure – was delivered with what one shareholder criticised as a lack of energy. "Why is the board not more energised about recovery?" he charged. "It seems sleepy!"

It didn't help that chief executive Stephen Hester was recovering from a sporting accident and that the rest of the directors seemed hunched over the table like deposed archdukes awaiting a mob execution.

And if shareholders were looking for some crumb of comfort from their new chairman, some hint of recovery, some tiny positive sign of an upturn in current trading, none came.

Hampton and Hester stuck closely to the script of a slog lasting "three to five years". One could not but suspect that, even if there had been some good news to report, such is the shattered credibility of this bank, the shareholders would simply not have believed it.

And that is now the board's biggest challenge. "The past is done, but the company is not," was Hampton's best line.

But the bank's reputation has been ruined by its former chief executive. Trust and confidence in it is broken. Rebuilding this is, indeed, going to be a long slog, and cannot be anything else given the scale of the catastrophe.

Shares scrambled above 30p yesterday – a new landmark of sorts – extending the rally from the low of 10p earlier this year. In the Salvador Dali world of RBS share price percentages, it was a rally of 8.5 per cent, which somewhat flatters a 2.4p move. At the time of the last annual meeting, they were above 300p; the year before that, over 570p.To reclaim that level, shares would need to rise not 8.5 per cent, but 19-fold.

There is an impressively large core home-banking business on which to build, as Hampton puts it, "stand-alone strength". But it is going to need a radical make-over to overcome the pain and the stain left by the trauma of the past year. There is too little left for forgiveness, and too much lost to forget.

WHAT THEY SAID

"People were put in charge who knew nothing about banking," – Ron McColl, shareholder and former Director of Corporate Business at the Bank of Scotland.

"He's is entitled to his pension, what really angers us is the way that Sir Fred was given another 16 million to go when the bank is struggling." – Derek Grant, former employee, shareholder and vice chairman of the RBS Pensioners Association.

"In my day if somebody lost money like that they would have been sacked not rewarded." – Brian Hale, Glasgow, employee for 35 years.

"Ask Gordon Brown why he is demanding 12 per cent for preferential shares when the bank can only loan at one to three per cent for businesses and when shareholders can't get dividends." – Steve Ashworth, Dumfries.

"I think the vote today on remuneration was a warning shot for the board of RBS and boards around the world, at last institutional shareholders joined small shareholders and made it clear they are not simply take the board's word any more." – Kevin Hutchens, Aberdeenshire

"The board didn't listen to us. We wanted the two old directors to go but they are still there." – Nan Morton.

"They (the board) seem to be trying their best, but there doesn't seem much hope." Ella Watson.

"Sir Fred let the power go to his head and keeping the pension is just naked greed." – Cornelius Cagney, Ireland